According to AMA, a brand can be signified as a name, sign or symbol which can be used to make the goods and services identifiable to the customers or to the other resellers to make them differentiable to that of the competitor’s.
What is a brand??
Many managers say that the brand is something more than being just a symbol, name or design it is something that creates reputation of the company, creates awareness in the minds of the customers and increases the prominence of the company in the market.
Therefore, a brand can be said to be more than that the product since it has certain dimensions that can make it differentiable from the other products and can also satisfy the same needs of the customers. The brand can also be used as a source of achieving competitive advantage by the firm using its non product related techniques.
Advantages of creating a brand
- A brand can be used as a source of identification for the product
- It helps in assigning the responsibilities to the product maker
- Reduces the risks associated with the firm
- It helps in reducing the search cost
- It is like a promise or bond for the product maker
- It acts as a symbolic device which can be easily recognized
- It is represented as a signal of quality
There are different types of risks that are encountered by the customers while buying a product
- If the product does not perform as desired by the customers, it is known as a functional risk
- The risk associated with the product if it is intended to act as a threat to the health of the people, known as a physical risk .
- If the product is not worth the price for it, then it is the financial risk of the customers
- If the product or a brand brings embarrassment to the customers in their social circle, it is know as social risk.
- If the product has some impact on the mental health of the customer, then it is the physiological risk.
Importance of Brand to the firm
For the firms a brand is like a legal property which can be used to judge the behavior of the customers, and can act as a source of long term revenue generation.
There are some points of importance of brands to the firm :
- Helps in tracking the product and creates ease of handling it
- Helps in creating unique associations of the product
- Acts as a signal for quality
- Creates competitive advantage for the firm